Shi Dashenghua (603026)： New Power Battery Additive, Solvent Capacity to Create a One-Stop Supplier of Calcination
Shi Dashenghua (603026): New Power Battery Additive, Solvent Capacity to Create a One-Stop Supplier of Calcination
Event: The company announced that it will invest in a 5-month / year dimethyl carbonate (DMC) project and a 5000-ton power battery additive project. The company is a leader in the DMC industry.The company invested in Dongying Port Economic Development Zone 5.6 million US dollars to build a 5-year budget / annual dimethyl carbonate plant and supporting public works. The project construction period is 2 years. After the project is completed and put into production, the annual budget is expected to be realized.30,000 yuan, with an average annual gross profit of 75.39 million yuan.The company is an absolute leader in the DMC industry and currently has a DMC capacity of 12.5 Statutory / year (equity capacity) 10.May / year), with a market share of over 30%, is the only domestic dual-base production enterprise.The company has 2 sets of 5 launches / year and 1 set of 2.5 per year / DMC device, using rich PO-DMC project construction and process management experience, while relying on Shandong’s rich propylene oxide (PO) resources, the upcoming production expansion will further consolidate the company’s leading level in the DMC and even carbonate solvent industry. The new power battery additive project is expected to provide customers with one-stop service.The company plans to set up a wholly-owned subsidiary-Dongying Shida Shenghuarong Innovative Materials Technology Co., Ltd. to build a 5000-ton / year power battery additive project in the Dongying Kenli District.One phase invested 60 million yuan. The construction content includes 200t / a of lithium difluorophosphate, 100t / a of lithium tetrafluoroborate, 100t / a of lithium difluorooxalate, 20t / a of vinyl sulfate, and 100t / a of lithium bisoxalate.Lithium fluoride 300t / a and fluorobenzene 600t / a are planned to be put into production in August 2020.Solvents, lithium salts, and additives are the three major components of sulfuric acid. The company is currently the only company in China that can provide 5 kinds of carbonate solvents and lithium salts to the silicon carbide supplier at the same time, up to 30 tablets per year and 1,500 tons of carbonate solvents/ Year lithium hexafluorophosphate production capacity, customers include New Zebang, Tianci Materials, Jiangsu Cathay, BYD, Mitsubishi Chemical, Ube Industrial and other well-known multinational companies.The company’s forthcoming power battery additive project will realize the full set of solvents, lithium salts, and additives, and become a one-stop service capability for enterprises. Bind downstream core customers and work together to explore the European market.In March 2019, the company took a 51% stake and jointly invested with PCCRokita in Poland to establish a joint venture. It plans to develop, construct and operate lithium ion battery material projects, and plans to invest in the first phase.70,000 yuan for the construction of the initial / annual ethylene carbonate (EC) product project in Nizhny Berge, Lower Silesia, Poland, with an estimated construction period of 2 years.The company’s downstream core customers, New Zebang and Jiangsu Cathay Pacific, have successively invested in crude oil projects in Poland. The company’s Polish EC project can provide customers with nearby supplies and expand the surrounding market, improve service quality, reduce logistics costs, and increase the company’s profitability. DMC has entered a peak demand season, and prices have risen sharply recently.Recently, due to the typhoon weather in Shandong area, the operating rate of DMC has dropped and the price has increased. In the last week, the price of DMC has increased by 700 yuan / ton to 6200-6400 yuan / ton. At present, the first-level offer is above 8,000 yuan / ton, and the export order price is 9,000 yuan/ Ton.The price of raw materials in Shandong in the past week rose by RMB 600 / ton to RMB 10,700-10,800 / ton, and the cost side supported DMC prices.Looking at the demand side, downstream PC manufacturers have gradually increased their procurement. Lihuayi’s 13-ton / year plant starts normally, and DMC needs to be around 1,000 tons per week; Lutianhua’s 10-ton / year plant starts to stabilize and the operating rate is 5-6.Procurement has continued 杭州桑拿 to be normal and just needs to be purchased; Puyang Shengtong Juyuan 13 position / year, Hubei Ganning 7 position / year device test commissioning just purchased.In terms of natural gas, the current operating rate of downstream battery plants has increased, and the order of solvents has basically recovered. In the later period, attention needs to be paid to the execution of orders.We expect that the operating rate of PC-based Tianhua will continue to climb. Ganning Petrochemical and Liyang Shengtong Juyuan are expected to start production in Q3. New energy vehicle sales in the second half of the year will still be 800,000-900,000, driving demand for DMC, and DMC is entering a peak demand season., The price will officially enter the upward channel, profit forecast and investment advice.It is estimated that the company’s net profit attributable to the parent in 2019-2021 will be 5.1.7 billion, 6.5.0 billion, 6.80 billion, EPS is 2 respectively.55 yuan, 2.99 yuan, 3.35 yuan, corresponding to PE is 12X, 10X and 9X, maintaining the “buy” level. Risk reminder: the risk of rising prices of dimethyl carbonate and ethylene carbonate, the risk that the demand for new energy vehicles is less than expected, the risk of increasing the capacity construction progress than expected, and the management risk of overseas project implementation.